How controllers can position themselves to serve as valued strategic partners to the CFO and the business.

As CFOs continue to rearrange their priorities, controllers can expect to find their own portfolio of responsibilities expanding.

Part 1 of this article series explained why CFOs will likely place greater demands on controllers in the post-pandemic economy and listed seven opportunities that controllers can seize to extend the value they provide to CFOs and to the business. The article explored the first three of those opportunities: reporting critical metrics and value drivers of the business in near real time; rethinking disclosures to support investor decision-making; and improving capital allocation decisions and investment performance. What follows is a discussion of the four remaining opportunities.

Driving Information and Data Governance and Systems Initiatives

The opportunities for controllers to add value, whether in the areas of metrics and drivers, disclosures, or capital allocation, are predicated on the availability of better information and insights. Indeed, finance, including the controllership function, is central to the flow of financial information in a company and to identifying trends and developing insights from a vast number of data points.

In the absence of a chief data officer, the controller is strategically positioned to oversee the collection, organization, analysis, and governance of financial data to provide the information needed to support critical decisions. In fact, enterprise data governance is an area where the controller function can play an increasingly significant role. While controllers have historically been responsible for overseeing data governance over financial reporting information, they may also be well positioned to oversee the integrity of the financial and driver data used to develop business metrics.

Enhancing Resiliency and Risk Management

The pandemic has made clear that resiliency—the ability to bounce back after an adverse event—is as important as risk management. Consider, for example, how the pandemic forced many finance organizations to radically change the way they work (think virtual) at the same time other risk events, such as cyberthreats and ransomware attacks, continued to rise.

While controllers will continue to play a critical role in identifying potential areas of financial and enterprise risk, the pandemic highlighted the importance of resiliency and determining the ability of the enterprise to respond to, and navigate, a risk event. For example, if the supply chain for a critical semi-conductor part in a company’s automobile production is disrupted, how quickly can it adapt to—and overcome—the constraint? When optimizing costs, are CFOs and controllers undertaking a risk-adjusted cost optimization, where they ask what could go wrong with the cost reduction strategy? And how quickly can the company bounce back under different adverse scenarios, and what must be in place to enable resiliency? The pandemic has likely challenged the traditional conversations on risk and increased management’s expectations of controllers and CFOs to build resilience and navigate risk events.

Driving Finance Transformation

When we asked CFOs in Deloitte’s North American “CFO Signals”™ survey for the first quarter of 2020 about their organizations’ transformation efforts, 49% of respondents reported serving as co-leaders for business transformation. Their most reported transformations involved changes to business strategies/models and upgrades to core business processes.

As finance chiefs turn their attention to these enterprise-level and business model transformations, they often rely more on their controllers to drive finance transformation. Why? Controllers are critical to the three outcomes finance transformation seeks to deliver: enhanced information for decision-making and resource allocation; increased speed in reporting critical information to decision-makers; and increased productivity, cost efficiency, and capabilities of the finance organization.

Achieving greater productivity and enhancing finance capabilities usually require what is broadly termed “finance transformation”—the leveraging of technology to automate work and productively enhance capabilities while rethinking the function’s work, workforce, and workplace. Given controllers’ knowledge of key finance and accounting processes and their mindset for detail combined with experience in project management, they are well suited to lead this effort. However, they will have to reimagine the underlying foundations of the future work of finance and navigate their organizations toward that future.

Developing Finance Talent

The overwhelming priority of CFOs in Deloitte’s Transition Labs is to improve the talent and capabilities of their finance organization. Finance transformation has only further driven the need to reimagine talent and demand new skills and career paths for high-performing staff. At times, however, human resources alone may not be able to effectively support these efforts. As leaders of generally the largest part of a finance organization, controllers can play a key role in developing and upgrading finance talent across the function. From implementing rotation and training programs to enhancing performance management and progression plans, talent development is a key area where controllers can step up and assist.

Forming a Strategic Partnership

How can CFOs and controllers step forward to the future? CFOs should lean in on their controllers as they focus on enterprise-wide transformation; meanwhile, controllers should embrace a broader agenda. From observations gleaned from our many Transition Labs, we believe the following steps can help these two executives move ahead on both fronts:

1. Controllers should develop a future-oriented agile mindset. In many Labs, we hear frustration about controller organizations that spend endless hours chasing data or analyzing history versus understanding and shaping the drivers of future outcomes. CFOs typically want one truth about the past and greater support managing through uncertainty. This requires controllers to provide that truth about the past, as well as insight into the likely drivers and ranges of future outcomes. Such insights may require embracing “agile” approaches to program execution, and even to budgeting and capital allocation. In such approaches, change efforts may be broken down into short sprints, and based on the outcome of each, there may be significant course-corrections.

2. Controllers should build transformation muscles. Most likely, this will require reallocating more of their time to their roles as catalysts and strategists, as opposed to acting as stewards and operators. It also means building up hybrid “agile” project management capabilities, change-management skills, and disciplines to reduce execution risks.

3. Controllers should become more knowledgeable about financial and related systems—and underlying data management. Information systems will continue to become core to finance transformation. High-potential finance talent should be exposed to systems development and data design and management early in their careers.

4. CFOs should support their controllers’ journeys. Specifically, CFOs can help by freeing up controllers’ time to address a broader agenda. One approach is to consider bifurcating the controllership function, with one person reporting to the controller for accounting, reporting, and compliance and another serving in the primary controller role to drive finance transformation, as well as data and systems modernization.

As the scope of the CFO role increases (to the “chief everything officer,” as one colleague puts it), the controller role will have to simultaneously expand. The effort will require controllers to both adopt the mindset and acquire the skills to execute the emerging controller agenda. That won’t happen overnight, but with strong support from CFOs, controllers can become more valuable to the broader enterprise and move into the catalyst and strategist roles they so often seek.

Editor’s note: Part 1 of this article series explored the dynamics shaping an expanded agenda for controllers in 2021.

Ajit Kambil, global research director, CFO Program; Patricia Brown, global deputy research director, CFO Program, both with Deloitte LLP; David Cutbill, advisory principal,   Controllership Eminence; Beth Kaplan, advisory managing director, Center for Controllership,™  both with Deloitte & Touche LLP